Facebook Ads bidding system is not an avoidable tool if you want to perform when running an ad on Facebook. It can have a significant result on the ROI of your campaign. If you don’t want to bother about it, you can ask Facebook to do it automatically. But in our opinion, this isn’t a good idea, especially if you want to optimise your budget and keep a closer eye to it. Bigbom can be the solution. With its automatic algorithm, it avoids you wasting your money and your time.
The basics of Facebook Ads bidding system
The amount of money that you bid is the maximum amount of money you will pay to achieve a result. It does not represent the exact money you will pay. Facebook will always take the minimum amount possible. It will be easier with an example. If an advertiser bids 0.5 USD while you are bidding 1 USD, you will in definitive pay 0.6 USD.
Just enough to beat your competitor.
What are the results you can bid on? There are the CPC or Cost Per Click that is the most-used metrics or the CPM, the Cost per Mille that is usually used for brand awareness but that also can be very unpredictable. Despite those two, we have also the number of conversions, the daily reach or the post engagement.
The bidding system is a harsh competition. With its huge traffic, Facebook can’t meet all the expectations and complete all the requests. That is why the highest bid always wins. Well, that is true but not exactly. The bidding system depends on three factors.
Of course, the amount of money you are bidding is the first and most important factor.
But Facebook is also looking at the relevance factor, the balance between positive interactions (likes, comments or shares) and the negative interactions (hiding ads).
Advertisements with a higher relevant factor will take good spots. The third factor is the estimated action rate. If the Facebook algorithm thinks that the number of actions taken
on your ad will be good, your ad will have the priority.
The amount of money is then very important and you have to puzzle that out. If you are bidding too low, you will reach fewer people, and sometimes you will not even be allowed to advertise. On the other hand, if you are bidding too high, you will pay more than what you will like for a result that is not worth it. While running a single campaign, it can be an obstacle but if you are running several advertisement campaigns, it can screw everything up and you can lose a tremendous amount of money.
Check more advanced tips, here are some for you!
There are several types of Facebook Ads bidding strategies
The Lowest Cost Strategy: Get as many ad placements as possible at the lowest cost.
The Lowest Cost with a Bid Cap Strategy: Make sure that your spendings stay under a certain cost.
These first two strategies are for thigh budgets and for advertisers looking for maximising their budget and their leads at a low cost.
The Target Cost Strategy: Set up an approximated target cost that you want to spend per bid. Facebook will calculate the average cost to spend on each ad. This strategy is suitable if you are looking to more conversions.
Pro Tips 1? When you are calculating your budget, don’t forget to take into account the long-term value of your customer and not only their purchase value.
Pro Tips 2? You can ask Facebook to directly address people who are more likely to become your customers or, for example, to people who are more likely to click on links.
The delivery strategy
Don’t forget that the delivery strategy (by default or accelerated if you are in a hurry) is also determinant for your bidding. We are talking about the schedule here, but releasing an ad during a period that is known for a peak competition (holidays) can affect your bidding.
Depending on the objectives that you have set up, you will have different bidding options.
For example, if you are choosing Traffic as an objective, you will have access to the CPC while, if you are choosing App Installation as objective, you will have access to Links Clicks only.
Now that you are a little bit more aware of the Facebook Ads bidding system, let’s go back to Bigbom.
One of the most amazing features of Bigbom can also help you settle this out. It can determine the right reasonable price, and automatically transferring the excess cost from
an ineffective ad to a well-functioning ad.
We can ensure that your budget is used in the most proficient way and with the highest productivity possible. In that way, you will no longer afraid of wasting a dollar and you will know exactly how much money you need to spend for a result.
(1) Bigbom.Global Facebook Page
(2) Massimo Chieruzzi, Facebook Ads Bidding in 2018 : Everything You Need to Know ( … Supported by Data) on AdEspresso – July 11, 2018